Income-tax thresholds and tax brackets are often confused. South Africa uses progressive personal income-tax rates together with tax rebates. The threshold is a general guide to the taxable income at which normal income tax becomes payable, after the basic age-related rebates. It is not the same as the first tax bracket.

The SARS thresholds for the 2027 year of assessment

For the 2027 tax year, running from 1 March 2026 to 28 February 2027, SARS states these annual tax thresholds: under 65 years, R99,000; ages 65 to under 75, R153,250; ages 75 and older, R171,300. These figures are annual, not monthly, and are subject to the normal application of tax law.

Threshold versus tax bracket

SARS’s first income-tax bracket for 2026/27 is 18% on taxable income up to R245,100 before rebates. This does not mean someone earning R100,000 always pays R18,000 in tax. Applicable rebates reduce the initial tax calculation. The 2026/27 primary rebate is R17,820, with additional rebates for qualifying older taxpayers.

Monthly comparisons

As a rough budgeting conversion, R99,000 per year is R8,250 per month. This arithmetic is useful for orientation only: it is not a rule about PAYE deductions or a guarantee about individual income tax. Your total taxable income, benefits, deductions, rebates and assessment determine your result.

When you have more than one income source

Employment income, certain investment income, rental profits and income from additional work can affect your tax position. If your circumstances are complex, look at the official SARS guidance for the relevant year of assessment or consult a registered tax practitioner. Avoid assuming that each source of income has a separate tax-free threshold.

How to use this information safely

  • Always check the year of assessment: the thresholds can change after the National Budget.
  • Keep your IRP5/IT3 documents and records of eligible expenses and contributions.
  • Use official SARS information when deciding whether you need to file and how to correct an assessment.
  • Do not share your eFiling login details or PINs in response to unsolicited messages.

Worked example: why tax is not simply your bracket multiplied by salary

Take an illustrative under-65 taxpayer with annual taxable income of R120,000 for the 2027 tax year. At the 18% first-bracket rate, the initial tax calculation is R21,600. Subtracting the 2026/27 primary rebate of R17,820 leaves R3,780 before any other relevant credits or adjustments. This is not a PAYE quote or a personal tax assessment: deductions, taxable benefits, other income, credits and individual circumstances matter.

Annual versus monthly thresholds

For 2026/27, the under-65 threshold of R99,000 is equivalent to R8,250 per month on a simple twelve-month division. Do not treat this as a rule that every payslip below R8,250 is exempt or that every payslip above it uses a flat tax rate. PAYE is calculated using prescribed payroll rules and the overall annual tax position may be different.

  • Use taxable income, not automatically your gross or net salary, when interpreting annual brackets.
  • Check the correct tax year: the 2027 year of assessment generally runs from 1 March 2026 to 28 February 2027.
  • Allow for applicable rebates and medical tax credits rather than multiplying income by a headline marginal rate.
  • For multiple income sources, consider the combined annual tax position and check official SARS guidance.

SARS Budget 2026 tax guide: https://www.sars.gov.za/budget-tax-guide-2026-web-version/.

Official sources and related reading

SARS Personal Income Tax — https://www.sars.gov.za/types-of-tax/personal-income-tax/

SARS Budget 2026 FAQs — https://www.sars.gov.za/about/sars-tax-and-customs-system/budget/budget-2026-frequently-asked-questions/

Further reading: How to Spot SARS Tax Scams — sars-tax-scams-south-africa.html.